Using unique panel data on individual transactions between buyers and sellers in the spot market for live hogs, we found a large degree of intra-day price dispersion. Motivated by this empirical puzzle, we offer an explanation which is rooted in the bargaining with search theory. We formulate three hypotheses involving the role of farmers’ search cost, bargaining parties’ patience, and asymmetric information that we believe can explain the observed phenomenon. Empirical analysis shows strong support for all three of the stated theoretical predictions, indicating that the bargaining with search theory explains at least 31 percent of the observed intra-day price variation in this market.

The main objective of this research is to compare estimates of technical efficiency obtained from the stochastic frontier approach for two samples of farmers of private and water user associations in the Nefzaoua Oases region (Tunisia), which are characterized by a severe scarcity of water and especially a high degree of salinity. Technical inefficiency effects are modeled as a function of farm-specific socioeconomic factors. Results suggest that both systems are technically inefficient. On average, the private system is found to be slightly more efficient than the associative one. Date yield could be explained mainly by four variables: water quantity applied per palm tree, labor per palm tree, phosphate per palm tree, and water salinity. Output elasticities of all inputs are found to be positive and significant except for the farmyard manure. Water salinity has a considerable negative impact on date productivity. For the technical inefficiency model, none of the socioeconomic variables seem to matter.

Using trout producer survey data and the contingent valuation method, we estimate willingness to pay for a potential insurance policy. The survey was conducted in 2005 across the United States; 268 producers completed the survey instrument, resulting in a response rate of 81 percent. Design of the contingent valuation method takes into account two coverage levels and four premium rates. Using standard willingness-to-pay techniques, we assess the premium rate that producers with varying practices and regions are willing to pay for two different coverage levels of insurance. In general, trout producers appear willing to pay premium rates of 2 to 11 percent for these coverage levels.

Problems of aggregation plague applications of microeconomics. The theory is derived from postulates of behavior of individuals, but we often have data only for groups of individuals. The economics of outdoor recreation is no exception. This paper addresses the aggregation issue for estimating the demand for outdoor recreation. What are the estimation and welfare implications of using individual vs. aggregated observations, if the latter is all we have?

Propensity score matching is used to estimate treatment effects when data are observational. Results presented in this study demonstrate the use of propensity score matching to evaluate the average treatment effect of unit-based pricing of household trash for reducing municipal solid waste disposal. Average treatment effect of the treated for 34 New Hampshire communities range from an annual reduction of 631 pounds per household to 823 pounds per household. This represents an annual reduction of 42 percent to 54 percent from an average of 1530 pounds per household if a town did not adopt municipal solid waste user fees.

We use a random utility model for birding destination choices based on the reports of Oregon and Washington State members of the Cornell University Laboratory of Ornithology eBird citizen science project. We estimate spatially differentiated welfare effects that birders may experience as a consequence of forecasted changes in land cover and climate. We predict per-trip welfare effects (equivalent variations) expected under a business-as-usual scenario using published forecasts for both land cover and species richness. We find significant county-level heterogeneity across eBirders in predicted average per-trip welfare effects. The results suggest discernible distributional consequences across active birders in different areas.

Sustainability science is an emerging field directed at advancing sustainable development. Informed by recent scholarship and institutional experiments, we identify key roles for economists and encourage their greater participation in this research. Our call to collaborative action comes from positive experiences with the Sustainability Solutions Initiative based at the University of Maine, where economists collaborate with other experts and diverse stakeholders on real-world problems involving interactions between natural and human systems. We articulate a mutually beneficial setting where economists’ methods, skills, and norms add value to the problem-focused, interdisciplinary research of sustainability science and where resources, opportunities, and challenges from science bolster economic research specifically and land/sea grant institutions broadly.

Use of the economic threshold to improve the efficiency of preemergent-herbicide treatment decisions is limited by a lack of weed information. An economic model for assessing the expected value of weed information needed to implement a threshold decision rule is developed. Empirical results suggest that early season weed information can have value in cabbage weed management in Massachusetts.

This paper investigates cost-share program attributes that would affect producers' willingness to enroll in a cost-share program to fund the adoption of best management practices to improve water quality and decrease water use. Through a survey administered to Florida agricultural producers, we conducted choice experiments to assess farmers’ preferences for cost-share programs using five attributes: contracting agency, length of contract, annual verification process, costs included, and percent of costs covered. Results suggest that producers prefer cost-share programs with shorter contract lengths, self-monitoring, and administration by agricultural (as opposed to environmental) agencies. Our findings suggest the importance of an existing trust between the local communities and the contracting agencies for higher enrollment rates in cost –share programs. Our results can inform policymakers on ways to increase enrollment rates that move towards long-term environmental goals.

The notion of industrialized agriculture has been a dominant theme in the applied economics literature. More recently, the debate has entered the realm of organic agriculture, with some suggesting that the organic sector has strayed from its agrarian roots. The terms “industrial” and “agrarian” are widely used, yet few have given precise definitions of what the terms mean. This paper puts forth testable hypotheses for agrarian and industrial agriculture. Then, using census data from the 2008 Organic Production Survey, we examine the evidence to assess whether the organic farm sector fits an agrarian or industrial model. Overall the evidence is mixed, yet suggests that the organic sector is less agrarian than expected.

Water-quality markets that allow point-nonpoint trades assume that nonpoint best management practices (BMPs) achieve the targeted reductions as soon as they are implemented. However, changes in water quality in response to BMPs occur over time—from a few months to decades. We simulate emission allocations using static and dynamic-optimization models to determine whether a simple static allocation can produce results comparable economically and environmentally to complex multi-period designs for nitrogen emissions to Chesapeake Bay. We find that static rules provide relatively large cost savings compared to dynamic rules but result in a delay in achievement of water-quality targets.

This paper focuses on estimating the effects of the real FDI-weighted exchange rate on real U.S. foreign direct investment (FDI) in the global processed food industry. We use a straightforward production possibility framework as our theoretical basis to demonstrate the shift of production between countries on the basis of exchange rate fluctuations. The log-log regression model, derived from the theoretical model, gives statistically robust results to show that for the years 1983 to 2002, the exchange rate fluctuations, the level of fixed capital in the U.S. food industry, and the cost of materials in both the United States and abroad were major determinants of the stock of U.S. FDI in the global processed food industry. As the dollar appreciated, U.S. FDI increased. An overall conclusion is that countries with an undervalued exchange rate will experience increased FDI. Countries with overvalued exchange rates incur costs from lost export opportunities for domestic firms as well as discourage FDI.

Permanent conversion of agricultural land to urban uses has concerned both suppliers and demanders of agricultural products in recent years. Although controversy on the importance of the problems associated with this conversion persists among economists (General Accounting Office, Healy, Plaut), policymakers across the nation have accepted the preservation of farmland as a goal requiring government action. All but two States (Georgia and Mississippi) provide some form of preferential property tax assessment for farmland (Davies and Beiden). Most localities with zoning authority attempt to protect farmland, and several less common land use management institutions have been implemented with farmland preservation as a principal goal.

The need for models that forecast land use change spans many disciplines and encompasses many approaches. Pattern-based models were the first in which projections of change at specific locations in actual landscapes could be predicted. In contrast, recent economic models have modeled the underlying behavioral process that produces land use change. This paper combines attributes from each approach into a hybrid model using a multiple discrete continuous extreme value formulation that allows for multiple conversion types, while also estimating the intensity of each type of conversion, which is an important but often overlooked dimension. We demonstrate the simulation routine, which successfully predicts a majority of growth by type, time, and location at a disaggregated scale, for a three-county region in Maryland.

A hedonic pricing model is developed to estimate the effects of policies to control agricultural sedimentation on lakeside property values at 15 Ohio state park lakes. Using an LA/AIDS demand system, we estimate changes in social welfare that result from upstream soil conservation practices and/or lake dredging activity, while holding other property characteristics constant. Policy simulation results suggest that lakeside residents generally have a higher willingness to pay on an annualized basis for sediment reduction from upstream soil conservation than for lake dredging. This has important implications for soil conservation policy, particularly in targeting improvements in the economic efficiency of the Conservation Reserve Program.

Farm-to-school (F2S) local food procurement must be cost-effective to be financially sustainable without policy support. We test, among schools participating in F2S programs, whether market channel procurement strategies for local foods affect schools’ perceptions of whether meal costs decline as a result of F2S participation. Schools that buy local foods exclusively from intermediaries are 7 percentage points less likely to report lower costs from undertaking F2S initiatives. We further demonstrate that the probability that schools source local foods exclusively from intermediaries is influenced by the number of direct marketing farmers in their county.

Food away from home (FAFH) accounts for over 40 percent of food spending. We use NHANES survey data to examine resulting effects on commodity sectors, and find that production/consumption of beef, chicken, potatoes, cheese, and lettuce have increased the most due to FAFH, while fluid milk and all fruits have declined. Such changes have reduced overall nutrition, and nutrition within commodity categories is generally lower in restaurants than at home. FAFH consumers tend to have less healthy home diets than have nonconsumers, suggesting that observed low FAFH nutrition may be partly because restaurant diners select less healthy foods regardless of source.

This paper describes a novel experiment designed to examine how rent dissipation may occur in fisheries in which the right to participate is limited and fishermen compete amongst themselves for shares of an exogenous total allowable catch. We demonstrate that rent dissipation may occur through multiple mechanisms, and that the heterogeneity of fishermen has important implications for how rent dissipation occurs and the extent to which different individuals may benefit from the implementation of rights-based management. We apply this approach to investigate the concept of voluntary rights-based management under which managers divide the total allowable catch between two separate fisheries, and fishermen may choose between fishing for a guaranteed individual harvest quota and competing for a share of the total catch in a competitive fishery.

The use of survey or contingent valuation methods to estimate an individual's valuation of non-marketed goods, especially environmental resources, has attracted increasing attention in recent years. Initially, research efforts in this area were viewed by a majority of the economics profession with considerable skepticism. However, with the increased need for information on individuals’ valuation of a whole range of environmental resources and limitations on the ability of indirect market-based methods for valuing all of these resources, there has been a substantial increase in the use of contingent valuation methods to provide this information. Indeed, a recent state-of-the-art assessment (see Cummings et al. [1984]) of the contingent valuation method (CVM) has been able to develop a set of reference operating conditions under which it was reasonable to expect the CVM approach would yield estimates with accuracy that was approximately comparable to the indirect methods. Clearly the definition of these conditions is a judgmental one. Nonetheless, it was based on a substantial number of comparative studies evaluating the relationship between CVM and indirect market estimates of the benefits associated with changes in specific environmental resources. Moreover, it does reflect the changing attitude toward the CVM approach. It is therefore particularly appropriate to consider new directions in the development of the contingent valuation method.

This paper outlines a method to determine the tradeoff between economies of size in water treatment and diseconomies of distribution. Cost equations are estimated for several treatment technologies and distribution extensions. Empirical results are used to identify optimal system size where average total costs are minimized. Regardless of treatment, most costs are due to distribution. As water systems expand service territories, only in the most densely populated areas would remaining economies of size in treatment outweigh the diseconomies in distribution.